Stendörren: Many positives to highlight - ABG

Rental income up 1-2% from projects & M&A Ample firepower: SEK 1bn of available liquidity Trading below peers on both NAV and IFPM Progress on new letting, projects and M&A

Stendörren delivered a solid Q2 with net leasing of SEK 17m (62m TTM), a 0.1pp higher occupancy rate (to 91%), continuously high rental income increases on renegotiated contracts (22%) and improved progress in its development business. As well, it recorded its second-highest net acquisition figure since 2018 (SEK 179m). Following the end of Q2 on 6 July, a 5,000 sqm lease agreement was signed in Botkyrka that will boost net leasing in Q3. Since May, 12,000 sqm has now been signed with quality retail tenants in a premise that is currently vacated. Furthermore, two smaller projects (~4,700 sqm) received building permits in Q2 and a new, larger new logistics project (~17,000 sqm) was added to the ongoing project portfolio (both are in Stockholm South).

80% interest hedged for 3 years With Stibor 3M up >20bps in three days and 150bps since April (now ~1.5%), 80% of Stendörren’s outstanding debt is interest rate-hedged, with a majority (67%) capped at 1.8%. In addition, since most of these hedges were done in Q4’21, it results in a solid average interest maturity of ~3 years. The loan maturity (3.2y) improved from 2.3y q-o-q on the refinancing of existing properties, which has freed up more liquidity. With ~SEK 0.5bn in cash and an unutilised credit facility of ~SEK 0.5bn, it could expand by ~SEK 2.5bn without impairing its current equity ratio. CEPS ests. are down on higher interest rates, while ’22 EPRA NRV is up on updated project info. (incl. the tenant adjustment announced in May).

~50% NAV discount to peers The share is trading at 0.91x reported P/EPRA NRV, 7% below its 5y average and ~50% below the average of peers CATE, NP3, SAGA and SLP. P/IFPM is at ~20x - 9% below its 5y average and ~20% below peers. However, a P/IFPM comparison fails to account for Stendörren’s non-yielding pro ... Läs mer på ABG Sundal Collier

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/stendorren/Equity-research/2022/7/stendorren---many-positives-to-highlight/